“It’s positive news that the trend of increasing debt, which began with the financial crisis five years ago, has been stopped,” he adds.

But shrinking economies make it difficult for Eurozone countries to get debt levels under control, despite pushing through harsh spending cuts and reforms because shrinking output makes the value of a country’s debt as a proportion of the size of its economy worse.

The International Monetary Fund, meanwhile, downgraded its growth forecast for the Eurozone Wednesday from 0.1% to a minus 0.2% contraction, warning the Eurozone “continues to pose a large downside risk to the global outlook.”

Given the bleak economic outlook, “one has to be prepared for the debt level in the Eurozone to rise,” says analyst Christoph Weil of Germany’s Commerzbank.

More than three years after Europe’s debt crisis started in Greece, the Eurozone only registers very meagre growth, with seven member countries still in recession—Spain, Italy, Greece, Cyprus, Portugal, Slovenia, and Finland—according to Eurostat.

Government debt across the entire 27-nation EU totaled 85.1% at the end of September, compared with 85% in June, according to Eurostat. The European debt levels compare to about 110% in the United States, 88% in Canada, or 240% in Japan, according to IMF data.

“Compared to the U.S. or Japan, Europe’s average debt level looks excellent,” Weil says.

He adds, “But the Eurozone is not one entity guaranteeing all of its member states’ debt. The problem is the unequal distribution, with some countries like Greece or Portugal having an unsustainably high debt burden.”

The highest increases of the quarterly debt level were indeed recorded in the countries worst hit by the crisis; Ireland’s rose by 5.9 percentage points to 117%, while the level was up 3 percentage points to 120% in Portugal.

Greece—which is in sixth year of a severe recession—recorded an increase of 3.4 percentage points to 153%, the Eurozone’s highest debt ratio.

“Once growth returns the Eurozone’s debt ratio will decrease, although we don’t expect that to happen before 2015-2016,” says Kater.

Echoing the trend of stabilization in Europe’s debt levels, rating agency Fitch revised its outlook on Belgium from negative to stable Wednesday, citing the government’s success in trimming its budget deficit as planned.

Belgium’s public debt level has now peaked at about 100% and will start dwindling to 79% by 2021, the agency added.

Germany has been the main reason the Eurozone as a whole has not fallen into recession. However, Europe’s biggest economy is showing signs of slowing down as the debt crisis takes its toll on the country’s exports.